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New York Attorney General Eric Schneiderman announced on Monday his plan to resubmit an expanded bill that would hinder the proliferation of ‘zombie properties.’ The term ‘zombie properties’ refers to properties that have been abandoned by their owners, most often because of foreclosure, and are in disrepair.
According to RealtyTrac, zombie properties accounted for 18 percent of the nation’s foreclosures. Although the percentage of zombie properties has decreased significantly since the third quarter of last year, particular metropolitans have experienced a rise in zombie properties. 28 percent of metros with a population greater than 200,000 exhibited an increase in vacated properties. Of the 28 percent, New York metros contributed greatly with Utica, NY having a 103 percent increase.
The office of Attorney General Schneiderman examined data as well and revealed a 50 percent increase of zombie foreclosures in the state of New York from 2013 to 2014.
Attorney General Schneiderman’s original legislation, titled the Abandoned Property Neighborhood Relief Act, would prevent zombie properties by “informing homeowners of their right to stay in their home until a court orders the homeowner to leave, requiring mortgage lenders and servicers to identify, secure and maintain vacant and abandoned properties much earlier in the foreclosure process, and creating registry of such properties to assist municipalities with enforcement of laws regarding property maintenance.”
The surge in dilapidated properties creates damage in two ways: municipalities must face the consequences of vacant properties (i.e. crime, vandalism, etc.) and neighbors must live amongst homes in disrepair which are not only eyesores but can cause property values to spiral.
With the support of more than a half dozen New York mayors, opposition still remains, but from lenders. The section of the bill that calls for mortgage lenders and servicers to secure and maintain vacant and abandoned properties is the main issue for opposition.
Some fear the financial ramifications lenders could face in order to maintain vacant properties. Not to mention, lenders may not have legal access to maintain a property depending on the situation. The bill is expected to be resubmitted within the next two weeks.